Trying out part-time self employment - any advice?

ahillsy

For years, I've been wanting to become part time self employed, so I can do some freelance work in my spare time (I am full time employed, PAYE and all that jazz).

Now, I'm at the point where I've lined up some freelance work and so am taking the plunge.

I don't know how much freelance work I'll get, it could be bits and bobs here and there....or it could turn out to be regular. So I just want to get straight in my head a few things:

- any earnings I make as self employed will be taxed at the rate that applies following on from my full time job (for simplicity, assuming I'm in the top bracket in full time, my self employed income would be taxed at that top rate too)
- assuming self employed earnings will be low (< £5000 per year), I don't have to pay any other NI contributions (class 1 is being paid in full time, and I could be exempt from class 2 for this amount)

The NI situation is the main point I want confirmation on - the last thing I want to do is go to the hassle of registering as part time self employed, and then doing very little throughout the year whilst having to pay out the extra NI contributions.

I really appreciate any advice (confirmation or otherwise) - just trying to knock down all the barriers that have to some extent put me off in the past.

Thanks in advance

RedSoleShoes

You can get an NI exemption certificate if you think you are going to earn <£5k ish (can't remember exact amount). I believe you have to apply for this within 3 months of becoming self-employed. Obviously if you earn more that year, you can just back pay. Otherwise, you can pay the weekly Class 2 contributions however I am unsure if refunds are available if you end up earning less than the limit for the exemption.

ahillsy

Thanks LilyDeTilly. I think it's more likely I'll be under the £5000ish limit, so think best to start of applying for exemption.